S.Africa President Ramaphosa announces cabinet of unity government
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[July 01, 2024]
LONDON (Reuters) -South Africa's President Cyril Ramaphosa
announced on Sunday a cabinet of the country's government of national
unity following weeks of protracted and at times acrimonious
negotiations.
Ramaphosa retained the African National Congress' Enoch Godongwana as
finance minister and appointed former opposition leader John Steenhuisen
as minister of agriculture, bringing the Democratic Alliance and other
parties into his new coalition cabinet.
Below are analysts' reactions to the announcement:
ELNA MOOLMAN, ECONOMIST, STANDARD BANK GROUP
"The Finance Minister’s re-appointment was widely expected. It is
positive insofar as we have always viewed him and his team as strongly
committed to the fiscal consolidation plan that they tabled.
"The portfolios focussed on priority areas for the policy reform agenda
include several improvements and some strong appointments. This
strengthens our long-standing optimism around the positive impact of the
traction with policy reform supported by Operation Vulindlela (the
policy implementation unit of the presidency and national treasury) –
although the structural reforms are by nature protracted, complex and
difficult."
MIKE VAN DER WESTHUIZEN, PORTFOLIO MANAGER, CITADEL
"This is good for continuity. Godongwana - and Treasury under his
leadership - have shown solid commitment to fiscal consolidation under
difficult circumstances.
"As far as I'm concerned the onus is on the rest of government to get
growth up sustainably in order for Treasury to have more wiggle room
with the budget. If government has more revenue to work with, then they
are able to sort out debt issues which has been the overhang threatening
South Africa's fiscal sustainability.”
SANISHA PACKIRISAMY, ECONOMIST, MOMENTUM INVESTMENTS
"The reappointment of Enoch Godongwana introduces an element of
continuity in the Finance Ministry, which is positive for confidence in
financial markets. The inclusion of a DA deputy minister adds to the
checks and balances of that portfolio and allows the DA to make a more
meaningful contribution to policymaking."
MICHAEL KAFE, ECONOMIST, BARCLAYS
"President Ramaphosa's new cabinet includes ministers from the
opposition in key portfolios that could help drive structural reform and
lift growth. Strategically, all opposition ministers are closely marked
by ANC deputies, and the president was also careful not to leave out the
left-leaning segments of his voter base.
"On the whole, the fact that the DA was offered some key ministries
where the injection of fresh ideas and the implementation of important
structural reforms could help lift the economy on to a higher growth
path is likely to be taken positively by markets. The fact that the EFF
was not offered any position will likely be perceived positively too."
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South Africa's president elect Cyril Ramaphosa interacts with a
group on the day of his inauguration ceremony for his second term as
South African president, in Pretoria, South Africa, June 19, 2024.
REUTERS/Alet Pretorius/File Photo
JEE-A VAN DER LINDE, SENIOR ECONOMIST, OXFORD ECONOMICS
"There will be a palpable sense of relief that Mr Ramaphosa has
finally named his executive following protracted and often terse
negotiations with his new coalition partners. Working in silos is
simply not an option for the incoming government and finding
agreement on sticky issues will be of great importance.
"With the new Cabinet finally unveiled and most of the uncertainty
out of the way, the government can finally get on with the task at
hand. Although it remains to be seen whether the GNU will be able to
address South Africa's economic issues, we consider this is a
business-friendly outcome.”
ANDREW MATHENY, ECONOMIST, GOLDMAN SACHS
"In our view, the cabinet outcome resulting from elections one month
ago likely points to policy continuity, in particular a continued
fiscal consolidation with the primary surplus likely to rise from
0.5% of GDP in FY23/24 to 1% of GDP in FY24/25 (in line with
existing plans). This view is reinforced by the reappointment of
Finance Minister Enoch Godongwana. Given the multi-party arrangement
in the new government, we see some upside potential for reforms,
which could accelerate given greater accountability/oversight that
could translate into improved policy implementation.
"Set against this, however, are greater political risks given
potential disagreement within the coalition that could impede the
effectiveness of government. From a market perspective, we view the
latest developments as positive as the market is likely to price out
lingering short-term uncertainty over the past several weeks of
coalition/cabinet negotiations."
ZIYANDA STUURMAN, SENIOR ANALYST, AFRICA, EURASIA GROUP
"Ramaphosa made several changes. For example, the energy and mining
ministries have been separated.
"Crucial state-owned entities such as national power utility Eskom
and freight rail and port authority Transnet will now be under the
management of the energy and transport ministries respectively. The
integration of Eskom and Transnet into the relevant government
departments will also likely take several weeks and how the new
ministers manage this new role will be a key watch point."
(Reporting by Karin Strohecker, Bhargav Acharya and Kopano Gumbi,
editing by Emelia Sithole-Matarise)
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